Streamline Processes to the CFZ and Panama Customs

Streamline Processes to the CFZ and Panama Customs

Table of Contents:

Colon Free Zone (CFZ)

CFZ and Panama Customs: Imports and Duties

Trade Declaration

Streamline Processes to the CFZ and Panama Customs with GeTS H2H eDeclaration Service

The Colon Free Zone (CFZ) provides many opportunities for traders and brokers. As one of the largest ports and trade hubs in the world, the CFZ allows you to connect with global suppliers and customers from a single location. The import clearance process is similar to that in North America, with importers or their agents required to submit shipment data to Customs in advance of cargo arrival. To streamline processes to the CFZ and Panama Customs, for faster and more efficient processing and cargo clearance, electronic transmission is the way to go. With GeTS, traders can now prepare and submit electronic declarations to Panama Customs and CFZ authorities using the H2H eDeclaration Service for CFZ DMCE. Read on for more information on filing processes to the CFZ and Panama Customs.

Colon Free Zone (CFZ)

The Zona Libre de Colón or Colon Free Zone (CFZ) is a port and trade zone near the Atlantic entrance to the Panama Canal. The Colon Free Zone serves a redistribution hub to Latin America, Caribbean and other countries. Bulk duty-free shipments are unloaded in the CFZ and repacked, labeled and reshipped in smaller quantities to global locations. The CFZ generates $14 billion in import and re-export revenue annually.

The Colon Free Zone is largest free port in the Americas and the second largest in the world. As the main distribution center in the western hemisphere, CFZ products make their way to Central and South America, as well as the Caribbean. To support the busy hub, an international airport, railroad terminal, seaports, cruise terminals, and multiple warehouses can be found in the surrounding area.

Commercial activities in and around the CFZ include banking and finance, logistics and transport, cargo handling, warehousing, and IT support. The CFZ also features assembly, repacking and redistribution facilities. More than 3,000 companies operate in and the CFZ, which receives over half a million visitors every year.

The zone sits close to the Atlantic entrance of the Panama Canal, which has an annual traffic of 12,000 merchant vessels from 75 countries. Because of its strategic location, the CFZ is a major hub for suppliers to the North American market and the rest of the world.

The goal of the Colon Free Zone is to promote international trade under a tax-exempted environment where majority of commercial activities are wholesale oriented. The CFZ attracts both wholesalers and retailers because of the port’s redistribution model. Instead of working with multiple agents in different countries, a business can partner with a Panama broker to access multiple markets at once from a single location.

The CFZ is home to customs brokerage firms, IT and logistics service providers, freight forwarders, handling agents, importers/exporters and other trade participants. Like other international trade hubs, the CFZ handles a large volume of inbound and outbound shipments, and Panama Customs authorities process thousands of paper and electronic transactions daily.

The customs clearance process is similar to the United States and Canada, requiring the submission of electronic shipment information to regulatory agencies in advance of actual arrival. Advanced electronic submission of cargo data improves risk assessment and allows Panama Customs officials to identify and handle potential threats associated with inbound/outbound shipments more effectively.

CFZ and Panama Customs: Imports and Duties

Except for shipments considered as dangerous to health or against the law, there are few import restrictions in Panama. Certain products, such as weapons, ammunition, fertilizers, plants and live animals, require a license from the Ministry of Agriculture or from the Department of Trade and Industry (weapons, plants, seeds and live animals) before import.

Some types of goods are subject to customs tariff equal or higher than 90 percent, including agricultural and agro-industrial products like tropical fruits, while others may be imported, stored, and re-exported without the need for customs approval or special taxes. About 50 percent of imports are exempt from duty. Imported goods that do not exist in the country are subject to duty of less than 27 percent.

All individuals or companies with a trading license can freely import unregulated goods into Panama. Licenses and permits, however, are still needed for agricultural, certain non-food agricultural products, and firearms. Importers/exporters of food and beverages must register with the Panama Food Safety Authority and comply with hygiene and quality control requirements. Food products that are not freely on sale in their country of origin cannot be imported into Panama.

Trade Declaration

Panama Customs requires the following shipment information for imports:

Import declaration (prepared by the Customs agent)

Commercial invoice (in English or Spanish, four copies)

Bill of lading (three copies)

Business permit number

Airline transport letter

Certificate showing the product is sold freely in the country of origin

DMCE System

The CFZ management has announced plans to modernize infrastructure and processes. It has been promoting the Dirección de Movimiento Comercial (DMCE) system for more efficient trade. IN 2007, the CFZ partnered with CrimsonLogic to develop the DMCE to facilitate trade and distribution.

Manual preparation and processing of trade declarations take hours for each transaction, resulting in backlogs and long lines at service counters. The DMCE system addresses these issues, while supporting expansion operations and streamlining customs clearance and e-document processing.

The DMCE system allows secure and reliable electronic information exchange among the CFZ administration, Panama Customs, ministry agencies, free zone companies, commercial banks, and customs brokers. Like the ACE and ACI systems in North America, the DMCE electronic system aims to improve productivity and considerably speed up the approval of customs documents.

Trade participants can use the DMCE system to file shipment documentation directly to customs 24 hours a day, instead of during business hours only. The DMCE improves collaboration and data sharing among traders, financial institutions and agencies like the Chamber of Commerce for faster risk assessment and decision making.

Streamline Processes to the CFZ and Panama Customs with GeTS H2H eDeclaration Service

Global eTrade Services (GeTS), a subsidiary of CrimsonLogic, is a leading trade facilitation solutions provider with three decades of experience in this area. GeTS helps trade participants all over the world streamline customs processing and optimize regulatory compliance cost effectively.

GeTS H2H eDeclaration Service is designed for individuals and businesses engaged in import/export in the Colon Free Zone. Instead of time-consuming manual processing, electronic filing can be completed in minutes with GeTS H2H. You get enhanced visibility with a 360-degree view of the movement of goods within the free zone, as well as access to accurate, real-time information. Use the service as a standalone web-based application or integrate it with your ERP to easily pull and share data among employees, suppliers and stakeholders.

“Consolidation of services on a single platform helps avoid data deduplication and brings in the efficiency, accuracy and ease of filing. GeTS is working on platform to process trade declaration with Customs and airway bill filing with Airlines on a single platform,” said Vikram Patil, GeTS Asst. Director.

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